That the stock market is the second best performer this year is well publicised, but it remains small and relatively illiquid. What impresses me more are the steps being taken by the Government in opening up the economy again. Tourism is undoubtedly a key driver for economic growth, but my sense is that they are taking the sensible approach and focusing on high value add tourism. Instead of 2 and 3 star concrete blocks catering to the full board package holiday groups, they are encouraging high end, boutique, eco-tourism etc. This has to be the way to go at least in the short term. It will be less disruptive to the country, establish a reputation for quality and an aspirational dynamic.
Economic policies on international investment could still be a little further liberalised, but we have to be realistic and again it appears that they are approaching things in a sensible fashion. Infrastructure projects dont just appear overnight and service quality cannot be taught immediately, but the fundamentals of natural environmental beauty and a friendly population make Sri Lanka appear poised for continued growth as a high end tourist destination.
In other areas, the natural wealth of the country from seafood to gems to agriculture are all appropriate for consumer (and indeed business) demand.
I am bullish!
